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Marketing - chapters 1-2
Terms in this set (50)
A philosophy, an attitude, a perspective, or a management orientation that stresses customer satisfaction.
An organizational activity, set of institutions, and processes.
Entails processes that focus on delivering value and benefits to customers, not just selling goods and services.
The conditions for this to take place include: 1. At least two parties 2. Something of value 3. Communication and delivery 4. Freedom to accept or to reject 5. Desire to deal with other party
Internal capabilities of the firm. Doesn't consider if what is produced meets market needs. Example: Henry Ford's Model T availability in any color as long as it was black
Aggressive techniques and belief that high sales result in high profits. Disregards market needs and consumer demand. Despite the quality of sales force, often cannot convince people to buy what is neither wanted nor needed. Example: Dot.com businesses in the late 1990s.
satisfying customer needs and wants while meeting objectives. Focusing on customer wants and needs to distinguish products from competitors' offerings.
Integrating all the organization's activities to satisfy these wants. Achieving the organization's long-term goals by satisfying customer wants and needs legally and responsibly. Example: Ritz Carlton Hotels, Coach
satisfying customer needs and wants while enhancing individual and societal well-being. An organization exists not only to satisfy customer wants but also to preserve or enhance individuals' and society's long-term best interests.
Less toxic products
More durable products
Products with reusable or recyclable
Example: The Body Shop, Turtle Wax, method,=.
Customer value requirements
Offer products that perform
Avoid unrealistic pricing
Give the buyer facts
Offer organization-wide commitment in service and after-sales support
Co-creation with customers
the managerial process of creating and maintaining a fit between the organization's objectives and resources and the evolving market opportunities.
Strategic business units
is a subgroup of a single business or a collection of related businesses within the larger organization, and has the listed characteristics. Has...
A distinct mission and specific target market
Control over its resources
Its own competitors
A single business or a collection of related businesses
Plans independent of other
Increase market share among existing customers. Manufacturer cents off coupons.
Attract new customers to existing products. Expansion into global markets by companies such as McDonald's, Coca-Cola, and Pepsi.
Create new products for present markets. Example: McDonald's introduces yogurt parfaits, salads, and fruit to offer customers more healthy options.
Introduce new products into new markets. Example: CVS, Avon, Coca-Cola
is a fast-growing market leader. Usually have large profits but need cash to finance growth. A marketing tactic is to protect market share by reinvesting earnings in product improvement, distribution, promotion, and production efficiency. Strive to capture new users as they enter the market.
generates more cash than it needs to maintain market share. It is in a low-growth market, but the product has dominant market share. The marketing strategy is to maintain market dominance by being the price leader and by making technological improvements. Allocate excess cash to high-growth prospects
has low growth potential and a small market share. Most leave the market. The strategy options are to divest or harvest.
If an SBU is a successful cash cow, a goal would be to ______ or preserve market share.
This is an appropriate strategy for all SBUs except stars. The basic goal is to increase short-term cash return without much concern for the long-run impact.
Getting rid of SBUs with low shares of low-growth markets is often appropriate. Problem children and dogs are suitable for this strategy.
Strategic marketing management addresses
What is the organization's main activity at a particular time?
How will it reach its goals?
The goal is to sustain and increase long-run profitability and growth. require long-term commitments of resources.
can threaten a firm's survival, but a good plan can help protect and grow the firm.
Examples: Macy's implements an additional beauty sales approach• General Motors sells the Saab nameplate• PepsiCo's decision to focus on "Healthy Fare" and the recent backlash/financial struggle from decreased Pepsi sales.
Why write a marketing plan?
The creation and implementation will allow the organization to achieve marketing objectives and succeed.
However, is only as good as the information it contains and the effort, creativity, and thought that went into its creation.
Answers the question, "What business are we in?"
profoundly affects the firm's long-run resource allocation, profitability, and survival
statements that are stated too narrowly suffer from marketing myopia. Foundation of any marketing plan. is based on an analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions. establishes boundaries for all subsequent decisions, objectives, and strategies.
The performance of a situation, helps firms identify their competitive advantage.
Strengths and Weaknesses are an internal assessment. Opportunities and Threats are an external environment assessment.
Examining internal strengths and weaknesses
Focus on organizational resources:
Company or brand image
Helps identify opportunities and threats
Designing a marketing strategy is based on six major environmental forces:
Types of competitive advantage
Cost, product/service differentiation, niche
Cost competitive advantage
-Subject to continual erosion -means being the low-cost competitor in an industry while maintaining satisfactory profit margins. This enables a firm to deliver superior customer value. Examples- DuPontDell Computers Wal-Mart Corporation Southwest Airlines Nike General Electric
Sources of cost reduction
Experience Curves: Costs decline as experience with a product increases, and encompasses marketing, manufacturing, and administration costs.
Efficient Labor: Labor costs in low-skill, labor-intensive industries can be reduced by going offshore or by outsourcing.
No-frills Products: Removing frills and options can reduce costs.
Government subsidies: Governments may provide grants and interest-free loans for target industries.
Product design: Cutting-edge design and reverse engineering can offset costs.
Reengineering: Reengineering in the form of pruning product lines, closing obsolete factories, or renegotiating supplier contracts can make firms more efficient.
Product innovations: New technology and simplified production techniques can reduce production costs.
New methods of service delivery:Examples include:
Outpatient surgery and walk-in clinics in the medical industry
Online-only magazines can help save on material and shipping costs.
Niche competitive advantage
advantage seeks to target and effectively serve a single segment of the market.
Is used by small companies with limited resources
May be used in a limited geographic market (For example, how might a small bookstore owner compete with Barnes & Noble and Amazon.com?)
a statement of what is to be accomplished through marketing activities. To be useful, should be:
Compared to a benchmark
Criteria for good marketing
1. Communicate marketing management philosophy
2. Provide management direction
3. Motivate employees
4. Force executives to clarify their thinking
5. Form a basis for control
a unique blend of product, place (distribution), promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market.
Post audit tasks
1. Profile and make recommendations about weaknesses and inhibiting factors as well as strengths and new opportunities.
2. Ensure that the role of the audit has been clearly communicated.
3. Make someone accountable for implementing recommendations
A marketing mix typically involves
Avoiding marginal customers
Cost competitive advantage can be achieved by
Superior production technology
In the context of SWOT analysis, a strength of an organization can be
In the context of a marketing mix, the product strategy includes
Public relations activities
In the context of a marketing mix, the promotion strategy includes
In the portfolio matrix, a _____ is in a low-growth market, but the product has a dominant market share; it is an SBU that generates more money than it needs to maintain its market share.
MaxNutri sells cookies and nutrition bars. The marketers at MaxNutri are trying to come up with a new and attractive packaging design for its cookies. In this scenario, MaxNutri is working on its _____ strategy.
Revel Inc., a cell phone manufacturer, launched its new range of smartphones that could only be purchased on the company's official Web site and not at retail outlets. This limitation may be attributed to the _____ element of Revel's marketing mix.
Change the pricing strategy
Synergy Corp. is large seller of energy-efficient bulbs that uses extensive promotional strategies to stimulate sales. Synergy has noticed that a competitor is doing well and is steadily gaining a large market share. The marketers at Synergy want to counter the competitor immediately by increasing the sales of its bulbs. What quick step can Synergy take to stimulate the sales of its products?
Product offering and product strategy
The heart of a marketing mix is the
The product in the marketing mix includes
Choosing a target market that is not crucial for the success of major competitors
Which of the following actions is closely associated with the niche strategy?
Favorable government regulations
Which of the following can be considered as a business opportunity in the context of SWOT analysis?
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